FA -Accruals

Details of B Co’s insurance policy are as follows: Premium for year ended 31 March 20X6 paid April 20X5 $10,800 Premium for year ending 31 March 20X7 paid April 20X6 $12,000 What figures should be included in the B Co’s financial statements for the year ended 30 June 20X6?

• 11,100 SOPL 9,000 prepayment

• 11,700 SOPL 9,000 prepayment

• 11,100 SOPL 9,000 accrual

• 11,700 SOPL 9,000 accrual

Which of the following statements is false?

• Accruals decrease profit

• Accrued income decreases profit

• A prepayment is an asset

• An accrual is a liability

On 9 October, Parker paid his heat and power bill for the three months ended 30 September 20X4. The bill included a meter rental charge of $60 for the three months ending 31 December 20X4 and a usage charge of $135 for the three month period to 30 September 20X4. Parker has an accounting year end date of 31 October 20X4. Which of the following pairs of adjustments is required in relation to the heat and power expense as at 31 October 20X4?

• Rental accrual of $40 Usage prepayment of $45

• Rental accrual of $45 Usage prepayment of $40

• Rental prepayment of $40 Usage accrual of $45

• Rental prepayment of $45 Usage accrual of $45

A company pays rent quarterly in arrears on 1 January, 1 April, 1 July and 1 October each year. The

rent was increased from $90,000 per year to $120,000 per year as from 1 October 20X2.

What rent expense and accrual should be included in the company’s financial statements for the year

ended 31 January 20X3?

• Rent expense 100,000 Accrual 20,000

• Rent expense 100,000 Accrual 10,000

• Rent expense 97,500 Accrual 10,000

• Rent expense 97,500 Accrual 20,000

At 31 March 20X2 a company had oil in hand to be used for heating costing $8,200 and an unpaid

heating oil bill for $3,600.

At 31 March 20X3 the heating oil in hand was $9,300 and there was an outstanding heating oil bill of

$3,200.

Payments made for heating oil during the year ended 31 March 20X3 totalled $34,600.

Based on these figures, what amount should appear in the company’s statement of profit or loss and

other comprehensive income for heating oil for the year?

• $23,900

• $36,100

• $45,300

• $33,100

A company has sublet part of its offices and in the year ended 30 November 20X3 the rent receivable

was:

Until 30 June 20X3 $8,400 per year

From 1 July 20X3 $12,000 per year

Rent was paid quarterly in advance on 1 January, April, July, and October each year.

What amounts should appear in the company’s financial statements for the year ended 30 November

20X3?

• Rent receivable $ 9,900 Statement of financial position $2,000 in sundry payable

• Rent receivable $ 9,900 Statement of financial position $1,000 in sundry payable

• Rent receivable $ 10,200 Statement of financial position 1,000 in sundry payable

• Rent receivable $ 9,900 Statement of financial position $2,000 in sundry receivables

A business compiling its financial statements for the year to 31 July each year pays rent quarterly in

advance on 1 January, 1 April, 1 July and 1 October each year. The annual rent was increased from

$60,000 per year to $72,000 per year as from 1 October 20X3.

What figure should appear for rent expense in the business’s statement of profit or loss and other

comprehensive income for the year ended 31 July 20X4?

• $69,000

• $62,000

• $70,000

• $63,000

Diesel fuel in inventory at 1 November 20X7 was $12,500, and there were invoices awaited for

$1,700. During the year to 31 October 20X8, diesel fuel bills of $85,400 were paid, and a delivery

worth $1,300 had yet to be invoiced. At 31 October 20X8, the inventory of diesel fuel was valued at

$9,800. What is the value of diesel fuel to be charged to the statement of profit or loss and other

comprehensive income for the year to 31 October 20X8?

• $87,700

• $89,400

• $88,500

• $91,100

The year end of M Co is 30 November 20X0. The company pays for its gas by a standing order of $600 per month. On 1 December 20W9, the statement from the gas supplier showed that M Co had overpaid by $200. M Co received gas bills for the four quarters commencing on 1 December 20W9 and ending on 30 November 20X0 for $1,300, $1,400, $2,100 and $2,000 respectively.

Which of the following is the correct charge for gas in M Inc’s statement of profit or loss for the year

ended 30 November 20X0?

• $6,800

• $7,000

• 7200

• 7400

A business compiling its financial statements for the year to 31 January each year pays rent quarterly in advance on 1 January, 1 April, 1 July and 1 October each year. After remaining unchanged for some years, the rent was increased from $24,000 per year to $30,000 per year as from 1 July 20X0.

Which of the following figures is the rent expense which should appear in the statement of profit or loss

for year ended 31 January 20X1?

• $27,500

• $29,500

• $28,000

• $29,000